Allianz to buy out minority shareholders in Irish subsidiary
German insurer’s move will net Irish Life more than €145m for its 30% stake
Allianz currently owns 66.5 per cent of the Irish entity, having bought into AGF Irish Life in 1998. Photograph: Martin Leissl/Bloomberg/Getty Images
German insurer Allianz is set to pay €160 million to buy out the minority shareholders in its Irish subsidiary.
This will net Irish Life just more than €145 million for its 30.4 per cent stake in Allianz Irish Life Holdings plc (AILH).
Other minority shareholders, who own 3.1 per cent of the business between them, will receive just under €15 million.
The deal is to be effected by way of a scheme of arrangement under the Companies Act 2014 and is subject to AILH shareholder approval and sanctioning by the High Court.
Allianz currently owns 66.5 per cent of the Irish entity, having bought into AGF Irish Life in 1998 when it was the holding company that owned 100 per cent of Church & General and Insurance Corporation of Ireland.
Irish Life’s shareholding in AILH was originally held by the former listed company Irish Life & Permanent, which was broken up following the financial crash here in late 2008 after receiving a €4 billion bailout from taxpayers.
Irish Life was then acquired from the State by Canada’s Great-West Lifeco in 2013 for €1.3 billion.
Irish Life said it agreed to sell its stake in AILH to Allianz so that it could “concentrate on its core business of helping people in Ireland look after their life insurance, health insurance, pension and investment needs”.
AILH is the holding company for Allianz Ireland, the second-largest property and casualty insurance company in Ireland by premiums. It is understood that the board of the Irish company was advised by Goodbody Corporate Finance.
Latest accounts for AILH show that it paid an interim dividend of €10 million in 2015 to its shareholders followed by a further €40 million, which was signed off by its board in January 2016.
Accounts for Allianz’s trading business in Ireland, show that it made an after-tax profit of €8.9 million in 2015, down from €43.9 million in the previous year.
Its gross written premium rose by 13 per cent in the year to just under €496 million while shareholder funds at the year end amounted to €352.5 million.
The company said its profitability declined in the year due to uncertainty in the injury claims environment here, with increased frequencies and claims inflation a feature of the year.
The insurer employed 617 staff on average in Ireland during 2015, with its payroll costs amounting to €53.2 million.